ALJDEC decisions subject to certification as final

2018A-3972-ROC · Registrar of Contractors · 2019-05-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 2, 2019, at 1:00 p.m.; the record was held open until May 7, 2019. APPEARANCES: Jessica Marie Pruett Baker (“Complainant”) appeared on her own behalf; Absolute Air Authority LLC (“Respondent”) appeared through Clinton Harris, its Control Person/Qualifying Party, and Kara Breen, its Control Person. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. According to the Arizona Registrar of Contractors’ (“the Registrar’s”) public website,[2] on December 18, 2013, the Registrar issued License No. ROC 28744 for Specialty Dual CR-39 Air Conditioning and Refrigeration to Respondent. On September 18, 2014, the Registrar issued License No. ROC 294390 for Speciality Dual CR-37 Plumbing to Respondent. 2. On August 24, 2018, Complainant filed a complaint with the Registrar, alleging that on July 20 and 21, 2018, Respondent had refused to repair her air conditioning unit on her house at 20621 N. Apollo Way, Anthem, Arizona 85086. Complainant attached a narrative to her complaint, which provided in relevant part: My air conditioner stopped working in August 2015 due to a failed capacitor. I called my at the time Home Warranty company, American Shield, and put in a repair request, and Clint Harris from [Respondent] was sent to my house to repair the unit. A new capacitor was installed, however, Clint stated my AC unit was 16 years old and was going to continue to have problems, so recommended I purchase a new unit in the near future. In contacted him a few weeks later and we agreed he would install a new Lennox compressor and condenser for an agreed upon price of $5800.00—this price included a 1 year warranty on labor, and Lennox offered a 10 year warranty on the parts. This job was completed on August 28, 2015. . . .

The following summer of 2016 (roughly May), I contacted Clint to notify him the AC unit was not maintaining the temperature in the house. I would set the unit at 76 degrees, and the house would stay at around 78-80 degrees and run literally the entire day without stopping. He stating that was “normal” for Arizona heat to fluctuate by a few degrees and didn’t think anything was wrong. He stated he would check out the unit when he came for my annual maintenance later on that summer. I contacted Clint on August 5, 2016 to schedule an appointment for my first annual maintenance. Clint came over on September 1, 2016 for maintenance. He stated there was a cross threaded line which had caused the coolant to slowly leak out of the system over the months which is why it was not cooling the house properly. Clint stated he fixed the leak and refilled the coolant and the problem should be resolved. He did these repairs and did not charge me for this visit. A few weeks later, APS updated my equalizer plan which had increased to quite a bit more monthly, so I reviewed my statements. My electric bill had been roughly $500-$550 monthly between July and September of 2016 which resulted in an increase on my monthly bill of about $100 a month for the following year.

The following summer of 2017, the unit continued to not maintain the temperature in my home. I contacted Clint again on August 21, 2017 because the house wouldn’t get below 80 degrees, and [the] unit began developing ice on the pipes on the exterior unit. Clint came over the following day and inspected the unit, but told me nothing was wrong with it yet again and that he couldn’t diagnose something that wasn’t occurring at the time he was there. The AC continued to struggle keeping temperature in my house, but at this point [I] was tired of being told nothing was wrong and just suffered through it.

Current: I contacted Clint on May 30, 2018 because the house wouldn’t get below 80 degrees. He came out again, and again, stated nothing was wrong with the unit. I contacted Clint again the morning of July 18, 2018 as I woke up to my house at 87 degrees at 5am, and the exterior unit was not turning on. I went to the breaker box on the side of the house, saw the breaker had kicked off, so [I] flipped it back on. I went into the house and turned the AC on again, but by the time I got back to the back yard, there was fluid everywhere and a chemical smell in the air. My husband who was in the back yard stated the unit had sprayed some type of fluid out the top of the unit roughly 10 ft in the air. We turned the unit off and I contacted Clint by phone and email at 7am when his business opens. I packed up my 3 dogs and 3 kids and sent them to other places as clearly we couldn’t stay in the house at that temperature which would only rise.

I did not hear a response back from Clint until roughly 2pm that afternoon. By this time, I was furious and had already contacted HARE Heating and Refrigeration to come out and look at it. Clint told me he wanted to “make this right” and that nobody else would know the back ground/history of the equipment so [he] asked me to reconsider and allow him to come out and see if he could fix the unit. I canceled the appointment with HARE, and Clint came out that Wednesday evening to look at the unit. He stated the compressor had failed and would need to warranty the part out with Lennox, which was not going to happen that evening. He stated He would follow up with me as soon as the part was in which would take a few days.

I attempted to contact him on Thursday and Friday and did not get a response back until Friday evening, July 20, 2018 around 9pm. He stated he had an accident while at work which resulted in him burning himself; so had been in the emergency room which is why he had not returned my calls. He asked if I still wanted him to replace the compressor that evening, which of course I said yes because my family of 5 (and 3 dogs) had been sleeping on couches at friend/family houses for the prior two days. He stated the warrantee compressor and install would cost me a total of $750.00 which was a 50% discount, and I agreed to those charges. He showed up around 1030pm on Friday night and left my house at 2am Saturday morning. He stated there was decreased airflow and believed I had “dirty coils” that I should consider cleaning. By 6am Saturday morning (July 21, 2018) the temperature had decreased from 98 degrees to 82 degrees. Myself and my husband left our house to run errands, came home at 9am and the house temperature was back up to 84 degrees. I walked in the backyard to the exterior unit and saw the pipes leading to the house had frozen over yet again and the [unit] was no longer cooling the house. I called Clint to let him know the unit was still not right, which he replied that he “knew it would happen” and would come out Wednesday or later that week and clean the coils of the unit for only $300.00, but only if he could clean the coils while they were still installed and he didn’t have to remove them all together. I was done.

My family left our house again, and shut off the AC unit on the way out. We contacted HARE Heating and Refrigeration again and explained what had happened. HARE made [it] out to my house on Monday, July 23, 2018 to inspect the unit. They found the unit had been improperly wired, the wrong compressor had been installed (an LG rather than a Lennox OEM), and the wrong refrigerant was added among many other thngs that were done only partially or incorrectly, HARE contacted Lennox manufacturer and explained what had happened, and Lennox proceeded to tell them no warranty request had been entered for my unit and the new compressor I had was not issued from them. The rep then VOIDED my warranty on the compressor due to the wrong coolant being introduced into the system which had ultimately caused catastrophic failure to the unit as a whole (See statement from HARE Heating and Refrigeration dated August 14, 2018 for additional details).

After multiple inspections and visits to my home over the span of a week, HARE Heating and Refrigeration was able to order all the correct parts for my unit and repair it on August 1, 2018, a total of 15 days living this nightmare. The repair ended up costing me thousands due to the negligence of Clint Harris as the part he installed did not belong in my unit nor did the coolant which resulted in the failure of the system.

The Better Business Bureau has also been notified and I will be contacting the licensing board next. Should resolution not be found after these attempts, I will be pursuing a claim through small claims court next, if not in addition too, due to the warranty being voided on my unit due to his negligence.[3]

3. The complaint was assigned to the Registrar’s Investigator Jim Dimond for investigation. On October 16, 2018, Investigator Dimond performed a jobsite inspection, which both parties attended. 4. Investigator Dimond’s jobsite inspection notes stated that, within 24 hours of Respondent replacing the compressor on the unit, it suffered “catastrophic failure” and Respondent refused to come out to repair the unit unless Complainant agreed to pay an additional fee. Investigator Dimond summarized his investigation, which relied on Complainant’s account and HARE notes on its invoices to describe their work, in relevant part as follows: On or about August 14th, HARE came out and performed a major overhaul of the system including changing out the compressor. It appears that the culprit for the failure was a compressor designed for an R22 refrigerant system however the system at the complainant’s home is designed for R410A and the two refrigerants are not compatible.

I contacted several suppliers in the valley to try and ascertain where the R22 compressor was purchased and by [whom] but as of this writing I have not confirmed that info. All 3 suppliers indicated that the compressor would not be compatible with R410A.

The complainant has provided a picture of the compressor prior to removal and it clearly indicates that it is for an R22 system.

Under the circumstances, Investigator Dimond opined that “it was prudent for the complainant to contact another HVAC contractor.”[4] 5. On December 4, 2018, Investigator Dimond on behalf of the Registrar issued a Directive that required Respondent to remedy the following workmanship by appropriate means on or before December 21, 2018, at 5:00 p.m.: The respondent installed a non-compatible R-22 compressor on the complainant’s R410A system resulting in significant failure and the likely voiding of the manufacturer’s warranty.

The respondent is to resolve the [complaint] in an appropriate manner pursuant to the bold, italicized and underlined paragraph on page 2 of this directive. . . . .

If your license roc 287444 is suspended for administrative reasons or is revoked, expired, or cancelled, you may not contract in any manner and may remedy the workmanship violations listed above only by paying a properly licensed contractor hired by Complainant to remedy your deficient workmanship or by reaching a financial settlement with Complainant.[5]

The Registrar’s public website does not show any prior discipline or administrative suspensions of Respondent’s License No. ROC 287444. 6. Respondent did not enter into a financial settlement with Complainant and Investigator Dimond referred the complaint to the Registrar’s Legal Department. 7. On January 2, 2019, the Registrar issued a Citation against Respondent’s contractor’s licenses [6] charging cause to suspend or revoke the licenses under A.R.S. § 32-1154(A)(3),[7] namely, A.A.C. R4- 9-108,[8] or A.R.S. § 32-1154(A)(22).[9] 8. Respondent’s qualifying party, Clinton John Harris, on behalf of Respondent filed a timely written answer to the Citation, denying any statutory violation, noting that Respondent’s work was modified by another contractor before Complainant filed the complaint and Investigator Dimond’s jobsite inspection, arguing that the directive was vague about what Respondent was supposed to do to comply with it, and moving to dismiss the complaint under A.R.S. § 32-1155(C)(1) and (2).[10] 9. On January 29, 2019, the Registrar issued an order denying Respondent’s motion to dismiss and referring the matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. 10. A hearing was held on April 2, 2018. Complainant submitted eleven exhibits and testified on her own behalf. Although Complainant wanted to submit her electric bills for the last four years, the Administrative Law Judge did not admit them. Mr. Harris testified on behalf of Respondent. Investigator Dimond also testified. Additional Hearing Evidence 11. Complainant testified consistently with the narrative attached to the complaint that she filed with the Registrar. Her electric bills have gone down since HARE replaced the compressor and she was able to keep her house at a more comfortable temperature after August 2018. 12. Investigator Dimond testified consistently with his jobsite inspection notes. He attempted to contact LG and Lennox but was unable to do so. He tried to track down the serial number of the compressor in Complainant’s photograph, but he was unable to do so. 13. Investigator Dimond testified that the directive required Respondent to pay Complainant money “to make it right.” 14. Mr. Harris testified that Respondent replaced the compressor on July 21, 2018. When Respondent inspected the unit, the air flow was low and the coils were dirty because the unit had not been properly maintained. Complainant declined to pay Respondent to perform necessary maintenance, and instead hired HARE to replace the compressor. 15. Mr. Harris testified that the compressor that HARE replaced was still under warranty. Respondent again moved to dismiss the complaint under A.R.S. § 32-1155(C)(1) and (2). CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[11] 2. Complainant bears the burden of proof to establish cause to discipline Respondent’s contractor’s licenses by a preponderance of the evidence.[12] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[13] The proponent of a motion is required to establish grounds to support the motion.[14] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[15] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[16] 4. A.R.S. § 32-1155(C) provides as follows: The registrar shall not issue a citation for failure to perform work in a professional and workmanlike manner or in accordance with any applicable building codes and professional industry standards if either:

1. The contractor is not provided an opportunity to inspect the work within fifteen days after receiving a written notice from the registrar.

2. The contractor's work has been subject to neglect, modification or abnormal use.

(Emphasis added.) Arizona courts have held that the use of the work “shall” in a statute usually means a mandatory provision: The use of the word “shall” in a statute usually indicates the legislature intended a mandatory provision. Ins. Co. of N. Am. v. Superior Court (Villagrana), 166 Ariz. 82, 85, 800 P.2d 585, 588 (1990). . . .

A mandatory construction will require that litigation involving substantial rights of both the State and appellees must be dismissed without a determination on the merits. . . .

Joshua J. v. Ariz. Dep't of Econ. Sec., 230 Ariz. 417, 421 ¶ 11, 286 P.3d 166, 170 (App. 2012); see also State v. Seyrafi, 201 Ariz. 147, 150 ¶ 17, P.3d 430, 433 (App. 2001) (“The word ‘shall’ normally indicates a mandatory provision while ‘may’ generally indicates a permissive one.” (citing Walter v. Wilkinson, 198 Ariz. 431, 432 ¶ 7, 10 P.3d 1218, 1219 (App. 2000)). Under this analysis, since Respondent did not have an opportunity to inspect its work and Respondent’s work was modified by another contractor, the Registrar should not have issued a citation or referred the matter to OAH for hearing. As the narrative that Complainant attached to the complaint that she filed with the Registrar states, she is not without a remedy in civil court or in the court of public opinion. 5. Under certain, very limited circumstances, the use of the word, “shall” has been interpreted to be permissive: In arriving at the Legislature’s intent, the effect and consequences of alternative constructions may be considered. See State v. Stockton, 85 Ariz. 153, 333 P.2d 735 (1958). A mandatory construction will require that litigation involving substantial rights of both the State and appellees must be dismissed without a determination on the merits. A contrary construction, however, permits the judicial resolution of the questions at issue. . . .

Department of Revenue v. Southern Union Gas Company, 119 Ariz. 512, 514, 582 P.2d 158, 160 (1978). Complainant acknowledges that HARE replaced the compressor before she filed the complaint. Neither Respondent nor the Registrar’s investigator had an opportunity to inspect Respondent’s workmanship after she filed the complaint and, by the time Respondent learned of complaint, there was nothing it could do to remedy the complaint except to pay money damages, which was what Investigator Dimond’s directive required. 6. “The Registrar’s power is limited to suspending or revoking a contractor’s license, or attaching conditions to the license. Money damages may not be awarded.”[17] As the narrative that Complainant attached to her complaint stated, she was dissatisfied with the air conditioning unit that Respondent installed for almost three years before she hired HARE to replace the compressor and, then, filed a complaint with the Registrar against Respondent’s licenses. If there was an emergency, it was largely a result of Complainant’s delay in filing the complaint with the Registrar. 7. Moreover, Complainant is not requesting any fully liquidated amount and her claimed damages appear to include excess electrical bills, the cost to fully replace the unit, monies paid to HARE, and other consequential damages.[18] As noted above, Respondent was never allowed to attempt to repair the unit and the Registrar’s investigator was never allowed to inspect the unit. Complainant’s evidence consists of HARE’s personnel’s hearsay statements on invoices, which may have been motivated by its desire to undermine a business competitor, and her lower electric bills at the end of the summer, which could have been caused by many factors. Under the circumstances, an award of damages under the guise of restitution is not appropriate. It is also not appropriate in view of A.R.S. § 32- 1155(C)(1) and (2) unambiguous prohibitions to devote the limited resources of the Registrar and OAH to attempt to use Complainant’s evidence to calculate what damages Respondent should be required to pay Complainant to avoid having its licenses suspended or revoked. 8. Because the Registrar’s investigator did not have an opportunity to inspect Respondent’s workmanship and Respondent did not have an opportunity to correct its workmanship to comply with the Registrar’s directive, this matter should be dismissed under A.R.S. § 32- 1155(C)(1) and (2). RECOMMENDED ORDER Based on the foregoing, it is ordered that, on the effective date of the final order in this matter, Complaint Jessica Marie Pruett Baker’s complaint against Respondent Absolute Air Authority, LLC’s License Nos. ROC 287444 and ROC 294390 in Case No. 2018-3972 shall be dismissed. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five days from the date of that certification. Done this day, May 22, 2019.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] At the time of the hearing, Complainant had remarried. The Administrative Law Judge amends the caption to show her married name. [2] See A.A.C. R4-9-117 (“In any disciplinary proceeding conducted by the registrar, the licensee’s entire license file including the record of prior citations and decisions may be considered by the registrar in making a decision and order in the case.”). [3] The Registrar’s electronic file at pdf pages 70 – 72. [4] See id. at 40 (jobsite inspection notes). [5] Id. at 38-39. [6] See id. at 24-30. [7] A.R.S. § 32-1154(A)(3) includes among the grounds to suspend or revoke a contractor’s license, “[v]iolation of any rule adopted by the registrar.”

[8] A.A.C. R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” [9] A.R.S. § 32-1154(A)(22) includes among the grounds to suspend or revoke a contractor’s license, “[f]ailure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar.” (Emphasis added.) [10] See id. at 8-10. [11] See A.R.S. § 32-1154(A). [12] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [13] See A.A.C. R2-19-119(B)(2). [14] See A.A.C. R2-19-119(B)(3). [15] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [16] Black’s Law Dictionary at page 1220 (8th ed. 1999). [17] J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 406, 690 P.2d 119, 125 (App. 1984) (quoted in Sunpower of Arizona v. Arizona State Registrar of Contractors, 166 Ariz. 437, 440, 803 P.2d 430, 433 (App. 1990)). [18] See A.R.S. § 32-1156.01; Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (Ct. App. 1990). In Sunpower, the Arizona Court of Appeals upheld the Registrar’s power to order a contractor to return to a property owner the cost that the contractor had charged the property owner for a solar heater where, although the contractor had made repeated attempts to repair the heater, he could not make it provide a habitable degree of heat. See id.

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826